richimgd
Member
Hi everyone.
I am setup as a bit of a small time business, by means of being registered as a sole trader. I am full time employed so only really do quite a modest amount of freelance work on the side, but thought I'd set myself up and do things the 'proper way' with a business account to handle all business income/expenditure so if my business grows I will have everything set up accordingly. I basically put all business earnings thorugh my business account, then any business related capital or operational costs get put through my business account - the usual stuff. So far I havent really had any 'big' business purchases, more day to day things like web hosting fees, stock photos, stationery etc.
In a nutshell, I started trading in November 2011 so haven't done a tax return yet - my first tax return will be coming up soon though..!
Here are some quite rough and modest figures of how my business finances are doing so far.
-2011-2012 (first year): Earned about £1,500
-2012-2013: So far earned about £1,000.
So, I have got about £2,200k in the business bank account currently (the above income minus some operational expenditure).
Now - here is the question. I want to invest in new computer equipment (Macbook Pro) for business use and would like to buy it out of my business account before I can declare it as profits so I only need to pay tax on the remainder of what’s left of my profits. - probably nothing! This way I would save a massive chunk out of my tax bill. Can anyone help explain how I would do this? I am a bit of a newbie when it comes to tax returns etc. Do I need to do my tax return for 2011-2012 and prepare to fork out tax on the £1500 earned that year and then claim it back next year or is there a way to change the dates around / have an extended first accounting period of trading so after I invest in the new equipment I only pay tax on what would be a much smaller amount of profit or as I anticipate I probably wont have any profit since buying an Apple computer is likely to cost pretty much most of the money in my business account - so in theory I wont have much taxable profit left..?
I am sure I have probably offended anyone with account experience so would appreciate any help. If I am totally wrong and misunderstood how thing process works, please let me know and feel free to put it in idiots terms! I will probably also seek the advice on an accountant but first want to get an overview of my options.
Many thanks
I am setup as a bit of a small time business, by means of being registered as a sole trader. I am full time employed so only really do quite a modest amount of freelance work on the side, but thought I'd set myself up and do things the 'proper way' with a business account to handle all business income/expenditure so if my business grows I will have everything set up accordingly. I basically put all business earnings thorugh my business account, then any business related capital or operational costs get put through my business account - the usual stuff. So far I havent really had any 'big' business purchases, more day to day things like web hosting fees, stock photos, stationery etc.
In a nutshell, I started trading in November 2011 so haven't done a tax return yet - my first tax return will be coming up soon though..!
Here are some quite rough and modest figures of how my business finances are doing so far.
-2011-2012 (first year): Earned about £1,500
-2012-2013: So far earned about £1,000.
So, I have got about £2,200k in the business bank account currently (the above income minus some operational expenditure).
Now - here is the question. I want to invest in new computer equipment (Macbook Pro) for business use and would like to buy it out of my business account before I can declare it as profits so I only need to pay tax on the remainder of what’s left of my profits. - probably nothing! This way I would save a massive chunk out of my tax bill. Can anyone help explain how I would do this? I am a bit of a newbie when it comes to tax returns etc. Do I need to do my tax return for 2011-2012 and prepare to fork out tax on the £1500 earned that year and then claim it back next year or is there a way to change the dates around / have an extended first accounting period of trading so after I invest in the new equipment I only pay tax on what would be a much smaller amount of profit or as I anticipate I probably wont have any profit since buying an Apple computer is likely to cost pretty much most of the money in my business account - so in theory I wont have much taxable profit left..?
I am sure I have probably offended anyone with account experience so would appreciate any help. If I am totally wrong and misunderstood how thing process works, please let me know and feel free to put it in idiots terms! I will probably also seek the advice on an accountant but first want to get an overview of my options.
Many thanks